Inter-firm rivalry and its impact on the stationarity of the economy are formalized in terms of selective efficiency that extends the Pareto and the Caldor-Hicks efficiency comparisons. Nash equilibrium of agents' decision-making is shown to be sufficient for an economy to be in equilibrium....

The first part of this paper deals with a review of the traditional theory outlining the possible role of risk classification as a remedy to asymmetric information problems that characterized the insurance market. Then, as opposed to the traditional quot;staticquot; risk classification, we...

Insurance markets are characterized by profound market imperfections. Insurance intermediaries reduce transaction costs and information asymmetries. From transaction cost economics,agency theory, and law and economics literature the hypothesis is derived that insurance brokers may provide more...

We provide strong evidence of advantageous selection in the Medigap insurance market, and analyze its sources. Using Medicare Current Beneficiary Survey (MCBS) data, we find that, conditional on controls for the price of Medigap, medical expenditures for senior citizens with Medigap coverage...

Standard models of adverse selection in insurance markets assume policyholders know their loss distributions. This study examines the nature of equilibrium and the equilibrium value of information in competitive insurance markets where consumers lack complete information regarding their loss...

Lawsuits alleging illegal and unethical insurance sales practices have received widespread publicity in recent years. Although many observers have argued that one source of ethical conflicts for insurance agents is the industry's reliance on straight commission compensation, there remains a...

Under the conditions conjectured by Rothschild and Stiglitz (1976)as leading to market failure, we demonstrate the existence of a uniqueequilibrium in a risk-sharing economy with adverse selection. This equilibrium may be separating or partially pooling: in an economy withthree types, for...

We consider a competitive insurance market with adverse selection. Unlike the standard models, we assume that individuals receive the benefit of some type of potential government assistance that guarantees them a minimum level of wealth. For example, this assistance might be some type of...

This paper includes couples on the demand side and analyses their implications on the problem of adverse selection in the annuity market. First, we examine the pooling equilibrium for individual-life annuities and show that in the presence of couples the rate of return on individual-life...

This paper investigates the effect of adverse selection on the private annuity market in a model with two periods of retirement. In order to introduce the existence of limited-time pension insurance, we assume that for each period of retirement separate contracts can be purchased. Demand for the...